EX-99 2 ex99.htm PRESS RELEASE DATED JULY 30, 2007 ex99.htm

Exhibit 99
 
TITAN REPORTS 20% INCREASE IN SECOND QUARTER SALES
 
Quincy, IL. - Titan International, Inc. (NYSE: TWI)
July 30, 2007
 
Second quarter and year-to-date highlights:

·  
Sales for second quarter 2007 were $210.3 million, up 20 percent, as compared to $175.2 million in the second quarter of 2006.
 
·  
Year-to-date sales were an all-time record of $436.6 million, a 22 percent increase from $357.8 million for the six-month period in 2006.
 
·  
Gross profit was $27.3 million for the second quarter, a 22 percent increase from the $22.4 million in the second quarter of 2006.
 
·  
Titan’s quarter-ending cash balance of $61.5 million is an increase of 58 percent over the March 31, 2007, balance of $39.0 million.
 
·  
Titan’s stockholders’ equity surpassed the $300 million mark to end the second quarter at $300.7 million, an all-time record and a rise of $113.5 million, or 61 percent, from the 2006 year-end balance of $187.2 million.
 
Statement of Chief Executive Officer:

“The second quarter has been very exciting for Titan. Our sales are up, as they should be from last year’s acquisition,” said Chairman and CEO Maurice M. Taylor Jr. “We are expanding our OTR (off-the-road) business and adding new OTR products by expanding capacity in Freeport, Illinois. While this is happening in Freeport, certain farm tires are being transferred to our Des Moines facility. Titan’s Board of Directors also approved the capital expenditures to produce the super giant radial 57- and 63-inch mining tires. The unique thing about this is that only two companies, Michelin (France) and Bridgestone (Japan), produce 63-inch radial tires at this time.

“So, Titan has put together an engineering team headed by Ernest Rodia, chief operating officer (Rodia retired from Goodyear in December 2003 as vice president of global engineering and manufacturing technology), to not only develop the 63-inch tires, but also a new 73.5-inch 15 degree tire and wheel to improve wear and performance. I believe that by producing these tires, Titan will show our customer base that we are the best, and making the wheel with the tire is what sets Titan apart from everyone else. We plan to produce sample 63-inch tires in first quarter 2008. The 73.5-inch tire will follow. Wheels that large are a real bear to produce, but since our mascot is a grizzly we should have no problem with production,” said Taylor.

“As you can see, Titan has the cash on hand to fund all current projects, except for acquisitions; therefore, we anticipate not borrowing money for the above-mentioned capital projects. These are exciting times at Titan and we believe our best is ahead. And yes, large tire sales in the farm market have finally started to pick up, and we believe they will increase each month out this year.”
 


Financial overview:

Titan International, Inc.’s net sales of $210.3 million for the second quarter of 2007 were 20 percent higher than the second quarter 2006 sales of $175.2 million. Net sales for the first half of 2007 were $436.6 million, up from the $357.8 million recorded in the first half of 2006, a 22 percent increase.

Gross profit for the second quarter of 2007 was $27.3 million, as compared to $22.4 million in the second quarter of 2006. Year-to-date gross profit was $54.5 million for 2007, as compared to $53.6 million for 2006.

Income from operations for the second quarter of 2007 was $13.2 million, as compared to $11.7 million in the second quarter of 2006. Year-to-date income from operations was $27.5 million in 2007, compared to $28.9 million in 2006.

Income before taxes for the second quarter of 2007 was $10.5 million, as compared to $9.3 million in 2006. Year-to-date income before taxes totaled $5.5 million in 2007, as compared to $23.7 million in 2006. The year-to-date total for 2007 included a $13.4 million noncash convertible debt conversion charge.
 
Income taxes of $5.5 million were recorded for the second quarter of 2007, compared to $3.7 million in 2006. Year-to-date, income tax expense was $3.0 million for the six months ended June 30, 2007, compared to $9.5 million in 2006.

Net income was $5.0 million for the second quarter of 2007, compared to $5.6 million in second quarter 2006. Year-to-date, net income was $2.5 million in 2007 and $14.2 million year-to-date in 2006.

For second quarter 2007, basic earnings per share were $.18, compared to $.28 at June 30, 2006. Year-to-date basic earnings per share were $.10, compared to $.72 year-to-date 2006.

Diluted earnings per share were $.18 for the second quarter of 2007 compared to $.24 in 2006. Year-to-date diluted earnings per share were $.10 for 2007 and $.60 for 2006.

Titan’s quarter-end cash was $61.5 million at June 30, 2007, an increase of over $28 million from $33.4 million at year-end 2006. Long-term debt was $200 million, decreasing from $291.3 million at year-end 2006.

The company’s stockholders’ equity increased $113.5 million in the first half of 2007. Titan’s equity balance reached $300.7 million at June 30, 2007, a significant increase from the $187.2 million at December 31, 2006.
 
Giant OTR mining tires expansion:

In May 2007, Titan’s Board of Directors approved funding for the company to increase giant OTR (off-the-road) mining tire production capacity to include 57- and 63-inch giant radial tires. This funding should allow Titan to produce up to an estimated 6,000 giant radial tires a year. Titan estimates this may increase sales as much as $240 million. Titan currently plans to be in start-up production of these giant mining tires by the end of the second quarter 2008.


 
Form 10-Q:

For additional information and Management’s Discussion and Analysis of Financial Condition and Results of Operations, see the company’s Form 10-Q to be filed with the Securities and Exchange Commission on July 30, 2007.

Safe harbor statement:

This press release includes forward-looking statements that involve risks and uncertainties, including risks as detailed in Titan International, Inc.’s periodic filings with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended December 31, 2006. The company cautions that any forward-looking statements included in this press release are subject to a number of risks and uncertainties and the company undertakes no obligation to publicly update or revise any forward-looking statements.

Company description:

QUINCY, Ill.—Titan International, Inc. (NYSE: TWI), a holding company, owns subsidiaries that supply wheels, tires and assemblies for off-highway equipment used in agricultural, earthmoving/construction and consumer (including all terrain vehicles and trailers) applications.
 
              

 
Titan International, Inc.
Consolidated Condensed Statements of Operations (Unaudited)
For the three and six months ended June 30, 2007 and 2006
 
Amounts in thousands, except earnings per share data.
 
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2007
   
2006
   
2007
   
2006
 
Net sales
  $
210,333
    $
175,194
    $
436,611
    $
357,771
 
Cost of sales
   
183,022
     
152,752
     
382,109
     
304,215
 
Gross profit
   
27,311
     
22,442
     
54,502
     
53,556
 
                                 
Selling, general & administrative expenses
   
12,683
     
9,493
     
23,967
     
21,774
 
Royalty expense
   
1,452
     
1,214
     
3,016
     
2,839
 
Income from operations
   
13,176
     
11,735
     
27,519
     
28,943
 
                                 
Interest expense
    (4,430 )     (3,709 )     (10,179 )     (7,432 )
Noncash convertible debt conversion charge
   
0
     
0
      (13,376 )    
0
 
Other income
   
1,731
     
1,313
     
1,546
     
2,149
 
Income before income taxes
   
10,477
     
9,339
     
5,510
     
23,660
 
                                 
Provision for income taxes
   
5,515
     
3,736
     
3,031
     
9,464
 
                                 
Net income
  $
4,962
    $
5,603
    $
2,479
    $
14,196
 
                                 
Earnings per common share:
                               
Basic
  $
.18
    $
.28
    $
.10
    $
.72
 
Diluted
   
.18
     
.24
     
.10
     
.60
 
                                 
Average common shares outstanding:
                               
Basic
   
27,213
     
19,695
     
24,031
     
19,639
 
Diluted
   
27,749
     
26,081
     
24,499
     
26,003
 

 
Segment Information
Revenues from external customers (Unaudited)

Amounts in thousands
 
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2007
   
2006
   
2007
   
2006
 
Agricultural
  $
124,104
    $
116,267
    $
259,400
    $
240,694
 
Earthmoving/Construction
   
72,342
     
29,005
     
147,460
     
60,806
 
Consumer
   
13,887
     
29,922
     
29,751
     
56,271
 
Total
  $
210,333
    $
175,194
    $
436,611
    $
357,771
 
 
     

 
Titan International, Inc.
Consolidated Condensed Balance Sheets (Unaudited)

Amounts in thousands
           
   
June 30,
   
December 31,
 
Assets
 
2007
   
2006
 
Current assets:
           
Cash and cash equivalents
  $
61,524
    $
33,412
 
Accounts receivable
   
117,595
     
73,882
 
Inventories
   
135,454
     
154,604
 
Deferred income taxes
   
27,705
     
29,234
 
Prepaid and other current assets
   
17,531
     
18,801
 
Total current assets
   
359,809
     
309,933
 
                 
Property, plant and equipment, net
   
182,678
     
184,616
 
Investment in Titan Europe Plc
   
62,663
     
65,881
 
Goodwill
   
11,702
     
11,702
 
Other assets
   
16,945
     
12,994
 
Total assets
  $
633,797
    $
585,126
 
                 
Liabilities & stockholders’ equity
               
Current liabilities:
               
Short-term debt
  $
0
    $
98
 
Accounts payable
   
43,543
     
25,884
 
Other current liabilities
   
50,680
     
36,942
 
Total current liabilities
   
94,223
     
62,924
 
                 
Long-term debt
   
200,000
     
291,266
 
Deferred income taxes
   
26,798
     
27,924
 
Other long-term liabilities
   
12,104
     
15,835
 
Stockholders’ equity
   
300,672
     
187,177
 
Total liabilities & stockholders’ equity
  $
633,797
    $
585,126
 

Visit www.titan-intl.com for conference call information.
 
Contact: Courtney Leeser, Communications Coordinator
(217) 221-4489